Several major coconut-producing countries are experiencing significant declines in production due to adverse weather conditions, leading to reduced global supplies and a sharp increase in prices. This situation has prompted discussions of export restrictions and shifts in consumer behaviour in the context of rising demand for this tropical fruit and its derivatives.

The Philippines, the world's largest producer of coconuts, faces a projected 20% drop in output this year. The coconut sector has been hit by extreme weather events over the past two years, including droughts and tropical cyclones, which have stressed coconut trees, particularly in the southern coastal regions where the largest exporters are based. Henry Raboruja, President and Chief Operating Officer of Axelum Resources Corp., a Philippine coconut and derivatives producer, told Al-Destur Magazine via email that "the main reason for the supply shortage is related to the climate," noting that these conditions have reduced yields, delayed harvests, and restricted farmers’ mobility.

In response, the Philippine Coconut Authority is conducting discussions with producers about retaining a portion of coconut oil for domestic use before permitting exports. An official statement from the authority explained, "This proposed plan aims to secure local supplies and stabilize prices without compromising our export commitments."

Indonesia, the world’s second-largest coconut producer, has also been affected by supply contractions linked to adverse weather patterns and increased internal consumption. The Indonesian Ministry of Industry has proposed a temporary export ban of between three to six months, along with measures such as export fees and the establishment of reference prices, to stabilise rising local prices that have surged by 150% in the last three months.

Other coconut-producing countries like Thailand and Vietnam are similarly confronting supply challenges due to climatic difficulties and growing domestic demand.

In Sri Lanka, where coconut production has also declined due to unfavourable weather and diseases, wholesale prices in Colombo’s weekly auctions have doubled over the past year. To alleviate market pressures, the government approved requests in February to import coconut kernel.

Despite these production issues, global demand for coconut products remains robust, driven by the fruit’s appeal as a plant-based, lactose-free ingredient with distinctive flavour. Axelum Resources Corp. identifies the United States as its largest market, with sales also growing in Europe and Latin America. Related products, including coconut oil, coconut milk, and dried coconut flakes, are benefiting from health-conscious and sustainability trends.

The International Coconut Community forecasts coconut oil consumption will increase modestly to 3.23 million tonnes this year from 3.2 million tonnes last year, with the US, European Union, and China continuing as the largest importers.

Echoing these trends, the US Department of Agriculture anticipates that global coconut oil stocks at the close of the 2024-2025 season will reach their lowest level in four years. Coconut oil prices have doubled since 2023, peaking at $2,658 per tonne, representing the highest levels in three years.

This price surge has impacted coconut traders in Malaysia where some have temporarily suspended operations. Local media outlets have recommended switching to alternative products such as cooking cream or yoghurt when preparing curries, sauces, and desserts.

The Al-Destur Magazine reports that the combination of supply constraints caused by extreme climatic events and rising consumption has placed the global coconut market under significant pressure, prompting producers and governments to consider measures aimed at price stabilisation and securing local supplies amid growing international demand.